Go Leasing, Inc. v. National Transp. Safety Bd.

• Citation: 800 F.2d 1514
• Decision Date: 30 September 1986
• Docket Number: No. 85-7401,85-7401
• Parties: GO LEASING, INC., Petitioner, v. NATIONAL TRANSPORTATION SAFETY BOARD; & Donald D. Engen, Administrator, Federal Aviation Administration, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1514

800 F.2d 1514

GO LEASING, INC., Petitioner, v. NATIONAL TRANSPORTATION SAFETY BOARD; & Donald D. Engen Administrator, Federal Aviation Administration, Respondent.

No. 85-7401.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 9, 1986.

Decided Sept. 30, 1986.

Lawrence B. Smith, Tucson, Ariz., Edward S. Coleman, Santa Monica, Cal., for petitioner.

Peter Lynch, Acting Chief F.A.A., Washington, D.C., for respondent.

On appeal from a decision of the National Transportation Safety Board.

Before SCHROEDER, BOOCHEVER and HALL, Circuit Judges.

BOOCHEVER, Circuit Judge:

The Federal Aviation Administration (FAA) issued an emergency order revoking Go Leasing, Inc.'s operating certificate for multiple violations of Federal Aviation Regulations (FARs). Although most FAA orders of revocation are stayed pending appeal, emergency orders are not. An administrative law judge (ALJ) modified the emergency revocation, imposing instead a ten-month suspension of Go Leasing's certificate. The National Transportation Safety Board (NTSB) affirmed. Go Leasing appeals, raising numerous challenges to the agency's action based upon claims that the FAA did not follow its governing statutes and regulations, the FAA's internal policies and regulations were not promulgated in accordance with the Administrative Procedure Act, and certain FAA regulations and governing statutes are unconstitutional. We affirm.

FACTS

Go Leasing, Inc. is one of three affiliated aviation companies, each of which held an During February and March 1985, the FAA conducted an extensive inspection of Go Leasing and its affiliates. All three companies shared the same principal office, company officers, directors, inspectors, chief pilots, and other personnel. Widespread violations of FAA certificate and recordkeeping rules were found, as were several safety violations. On May 2, 1985, the FAA issued an emergency order revoking each company's certificate. The FAA specifically charged that Go Leasing had failed to exercise the degree of care, judgment, and responsibility required of the holder of a Part 125 certificate, and that Go Leasing demonstrated a lack of qualifications for a Part 125 certificate. Go Leasing sought an expedited hearing pursuant to 49 C.F.R. Secs. 821.54-821.57 (1985).

                operating certificate issued by the FAA.  Go Leasing holds a Part 125 certificate authorizing it to operate certain aircraft other than in air transportation.  Part 125 refers to 14 C.F.R. Part 125, which regulates the operation of specified aircraft.  "No [Part 125] certificate holder may conduct any operation which results directly or indirectly from any person's holding out to the public to furnish transportation."    14 C.F.R. Sec. 125.11 (1986).  Such operations require an air carrier certificate under 14 C.F.R. Part 121
                

On June 7, 1985, the ALJ issued an oral decision following a four-day evidentiary hearing. The ALJ dismissed some of the regulatory violations charged in the emergency revocation order and found, as to the numerous charges sustained, that Go Leasing had not been shown to lack qualifications to hold a Part 125 operating certificate. The ALJ held, however, that "in light of the regulatory violations established [the FAA's order is] modified to provide for suspension of 10 months rather than revocation." With that modification, the ALJ affirmed the FAA's emergency order. Go Leasing appealed the ALJ's decision to the NTSB, challenging the ALJ's finding that "[t]he most serious charge against [Go Leasing was] that it operated commercial flights when it did not hold appropriate certificate authority" in violation of 14 C.F.R. Sec. 125.11(b) (conducting operations resulting from a holding out to the public to furnish air transportation) and 14 C.F.R. Sec. 121.3(e) (engaging in air transportation without appropriate operating certificate).

STANDARD OF REVIEW

In this appeal, Go Leasing does not challenge the sufficiency of the evidence supporting the ALJ's findings of numerous FAR violations. Therefore, the factual and credibility determinations of the ALJ and NTSB are accepted as established. 49 U.S.C. Sec. 1486(e) (1982). Rather, Go Leasing raises a variety of legal issues surrounding the statutory and regulatory authority of the FAA and the NTSB, including assertions that FAA regulations and internal policies were invalidly promulgated in violation of the notice and comment mandates of the Administrative Procedure Act, and that the FAA's enforcement action deprived Go Leasing of due process. We review purely legal issues de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

ANALYSIS

Section 609(a) of the Federal Aviation Act (the Act), 49 U.S.C. Sec. 1429(a) (1982), authorizes the Administrator of the FAA to issue orders suspending, revoking, amending, or modifying aviation certificates "[i]f ... he determines that safety in air commerce or air transportation and the public interest requires." The Administrator has discretionary authority to revoke a certificate immediately if he determines that "an emergency exists and safety in air commerce or air transportation requires the immediate effectiveness of his order." Id.

The gravamen of Go Leasing's arguments is that the FAA does not have the discretion to choose among a number of statutory enforcement actions, that in this case the FAA imposed what Go Leasing terms "punitive" certificate revocation action under section 609 of the Act, 49 U.S.C. Sec. 1429(a), that section 609 does not authorize sanctions for regulatory violations, and that the FAA should have used civil money penalties with right to jury trial under sections 901 and 903 of the Act, 49 U.S.C. Secs. 1471(a)(1) and 1473(b)(1). Go Leasing also advances several arguments under the Administrative Procedure Act (APA) and the due process clause of the fifth amendment.

Before we proceed with our analysis of the legitimate issues presented in this appeal, we reject Go Leasing's numerous and repetitive assertions of a continuing conspiracy by the FAA to cover up its alleged lack of authority for so-called punitive certificate actions. Nor do we approve of Go Leasing's impugning of the ethics of FAA officials, its counsel, and of the NTSB. There is no evidence whatever of any cover-up or of any unethical conduct on the part of the FAA or NTSB.

1. Agency Discretion To Select Statutory Sanctions

Go Leasing argues that it has a statutory right to receive a civil money penalty for violation of safety regulations, and to contest that penalty through jury trial, instead of the certificate action taken.

Under the Act, the Administrator is charged with responsibility for safety of flight of civil aircraft in air commerce. 49 U.S.C. app. Sec. 1421(a). To meet this goal, Congress has authorized a number of enforcement actions, including section 609 emergency certificate action, 49 U.S.C. Sec. 1429(a), civil penalties, 49 U.S.C. Sec. 1471(a)(1), summary seizure of aircraft, 49 U.S.C. Sec. 1473(b)(1), and writs of injunction, 49 U.S.C. Sec. 1487(a), among others.

Section 901 of the Act, 49 U.S.C. Sec. 1471(a)(1), provides for a maximum $1,000 civil penalty for each violation of the Act, and under 49 U.S.C. Sec. 1473, the party charged may demand a trial by jury to contest the civil penalty. These provisions in no way limit the FAA's discretion to choose to employ the certificate action authorized under section 609 of the Act, 49 U.S.C. Sec. 1429(a). Section 609(a) provides express authority for the Administrator to issue an emergency order revoking or suspending a certificate if safety and the public interest require.

Agencies charged with a prosecutorial function must have flexibility in confronting the varieties of facts presented in particular cases. See NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n. 32, 89 S.Ct. 1918, 1939 n. 32, 23 L.Ed.2d 547 (1969). There is no question that the Administrator has the legal discretion to choose between employing section 609 certificate action and section 901 civil money penalty remedies.

Under section 10(e) of the APA, 5 U.S.C. Sec. 706(2)(A), the relevant inquiry is whether the sanction imposed is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." The Supreme Court has specifically stated that "the ... choice of [administrative] sanction [is] not to be overturned unless the Court of Appeals might find it 'unwarranted in law or ... without justification in fact....' " Butz v. Glover Livestock Commission Co., 411 U.S. 182, 185-86, 93 S.Ct. 1455, 1457-58, 36 L.Ed.2d 142 (1973) (quoting American Power Co. v. SEC, 329 U.S. 90, 112-13, 67 S.Ct. 133, 145-46, 91 L.Ed. 103 (1946)).

The sanctions are clearly authorized by law. We cannot say that the FAA's choice of certificate action was unjustified under the facts of this case. The arbitrary and capricious standard requires a "wide deference" be given to an agency's choice of sanction. Holmes v. Helms, 705 F.2d 343, 347 (9th Cir.1983) (per curiam). The FAA issued its emergency order based, in part, upon evidence that Go Leasing flew 57 passenger flights without holding a requisite air carrier certificate under Part 121, lacked adequate management personnel, and had failed to inspect some of its aircraft engines when required. The FAA expressly based its order upon considerations of safety in air commerce and the public interest, 49 U.S.C. Sec. 1429(a), and reviewing courts "cannot reverse the agency decision simply because it might believe that the public interest could best be served by a different decision." Holmes, 705 F.2d at 347.

Further, the fact that the ALJ and the NTSB determined that revocation was not required does not render the FAA's action arbitrary or capricious. The NTSB's imposition of a ten-month suspension demonstrates the seriousness with which the NTSB regarded Go Leasing's...